Communist Countries: Crisis, Contradiction and Collapse

Introduction: A Beautiful Idea, Really?

I've often had people claim to me that communism would be a great idea, if only human nature let it work. But I don't think that Marxist communism in particular would work on even a theoretical level- the idea of a 'dictatorship of the proletariat' ever seeding power is beyond comprehension. Were then communist systems always doomed to fail, or might they have survived if not for a few historical quirks?

Marx claimed in Das Kapital that “capitalist production begets, with the inexorability of a law of Nature, its own negation”. His argument was that because capitalist societies relied on social production to create wealth but private appropriation to obtain wealth, they were fated to collapse. However, communist systems also suffered systemic crises, from the failure of the New Economic Policy to the USSR’s fall. Indeed, communist systems suffered from the same internal contradiction as capitalist systems, notably an exclusive extractive class which took profits away from socially productive workers. Communist systems in fact fared worse than capitalist economies from this because they entrenched party apparatchiks at the head of their economies and lacked the 'creative destruction' of capitalism. As a consequence,   they suffered systemic crises, to which unlike capitalist democracies, they could not adapt. I want to make two points in this post: first, that the autocratic nature of communist parties lead to the creation of a new extractive class, that of autocratic party bureaucrats and second, that this internal contradiction lead to crises in communist nations, leading to their eventual collapse. Thus, it will be proven that not only did communist systems contain internal contradictions; they suffered worse from them than capitalist systems.

Party Bureaucrats: The World's Best Rent-Seekers

Communist systems lead to the substitution of Marx and Engel’s bourgeois class who aimed for the “accumulation of wealth in private hands” for a group of party bureaucrats who were equally extractive, thus leading to an inherent contradiction. Official Soviet propaganda espoused that the regime was leading the USSR to a “brilliant future… one of liberty, equality, fraternity, guaranteed employment”. However, because of the inherent vagueness in Marx’s idea of the “dictatorship of the proletariat” which he claimed would lead to the “abolition of all classes” after a transition phase of socialist rule, all communist systems in reality did not transition out of bureaucratic socialism. As Olson notes, under Stalin this meant that the party expropriated all natural resources and capital to add to its yield to its tax collections and also directly controlled consumption and investment for its own benefit. 

Party members were rewarded from this expropriation with special stores, health care facilities and vacation spas in return for loyalty to the party. CPSU members were paid 127 per cent of the average wage of a government worker and their pay was one third of the government administration budget. Further, there was systemic soliciting of in-kind payments and direct stealing. They also engaged in what Verdery terms “political capitalism”, that is bureaucrats used the shortages inherent to the system to make a profit from selling scarce goods. Party “apparatchiks” thus became the class of rent-seekers that Marx railed against because the command economy allowed them to do so. They constituted a class both in terms of political power, economic capital and the ability to consume both more goods and those of a higher quality. Communist systems became a form of what Clark and Wildavsky call “vulgar capitalism” or “profit-making without competition… based on corrupt personal relations”. Simultaneously, bureaucrats were rhetorically devoted to “large-scale heroic means of production”, production based around work done cooperatively. Therefore, so-called communist systems suffered from the same internal contradiction as capitalist systems: while production was (at least initially- black markets eventually flourished) social and cooperative, the accumulation of wealth was private and worked by class expropriation.

Tear Down That Wall!

Further, this inherent contradiction led to inevitable crises in communist systems, to which they could not adjust unlike capitalist systems, which led to their collapse.  Marx believed that the inherent contradiction in the expropriation of workers by the bourgeoisie would eventually lead to a decline in the “rate of exploitation” because “vampire-like, the capitalist only lives by sucking labor”. His argument was that eventually this would lead to recessions and the awakening of class-consciousness. This problem was also present in the Soviet Union, where the extraction of wealth by members of the CPSU helped to slow economic growth to the point where in 1967 the GNP of West Germany was larger than the entire Soviet Bloc. In particular as Maier outlines the extractive process of the communist system hampered the social production of the workers on which it depended. 

Somewhat fittingly, this led to the class conflict that Marx had predicted capitalism falling prey to, especially the rise of the Polish trade union Solidarity that was integral in the USSR’s collapse. This was worsened by the chronic shortages of basic goods which led to worse recessions than those experienced in capitalist systems. Capitalist systems did not suffer as badly because, as Marx was unable to foresee, the welfare state was developed, which redistributed profits to the working class because it was in the bourgeois political class’ interest to avoid class conflict. In contrast, the extractive behaviours of communist party members were only possible through continued coercion of those they were apparently serving. As soon as communist regimes faced crises they could not adapt except by further coercion and entrenchment of expropriation behaviours. Thus, as soon as communist regimes were opened to partial openness such as under Gorbachev’s glasnost in order to create more profits to expropriate, they began to collapse under the weight of their own internal contradictions. This has occurred not just in the Soviet Union, but also in the fall of Yugoslavia, the transformation of the People’s Republic of China and recent partial reforms in the collapsing Cuban economy. Thus, the inherent contradiction in communist systems and their inability to adapt to the crises resulting from it led to their eventual total collapse. 

Conclusion and Consequences

In conclusion, contrary to Marx’s predictions, this essay has shown that the autocratic nature of communist “dictatorships of the proletariat” created the same inherent contradiction between the social production and private extraction and accumulation of wealth inherent in capitalism. Further, it has shown that this led to crisis and eventual collapse of communist systems because the extractive class in the communist system could not allow for it to be adapted unlike the capitalist bourgeois class. Thus, Marx’s proposed solution to capitalism became self-defeating in practice for precisely the reasons Marx felt that capitalism would fail.

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Dan Gibbons is a third year Bachelor of Commerce (Economics) student at the University of Melbourne. He has a forthcoming publication in Intergraph: A Journal of Dialogic Anthropology (about memory and nationalism) and is currently submitting papers on the rise of modern consumerism, the role of criminology theory in literary criticism and the institutional theory of nationalism. Dan is a keen debater and public speaker.

'It is the morality of altruism that men have to reject': Why I find Rand's Objectivism Objectionable

"I swear, by my life and my love of it, that I will never live for the sake of another man, nor ask another man to live for mine"- John Galt, Atlas Shrugged

Most philosophies, even those who are particularly detrimental in their consequence, have redeeming features: nihilism (broadly the idea that life has no meaning) provides an interesting criticism of the concept of meaning and anarchism validly points out that states have overreached boundaries in many circumstances. But Rand's Objectivism, cannot be redeemed as it is founded on the premise that, to quote Rand of "the concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute". This sounds fine on the surface- why can't we be self-interested? But instead of justifying this belief in self-interest via the outcomes it produces or recognising its limitations, Rand's idea just attempts to cut off all that is good about human beings (charity, altruism and cooperation) and replace it with a cold, calculating society. Indeed, Rand is so devoid of feeling- the despondency of nihilists, the anger of reactionary conservatism or the somewhat naïve hopefulness of communitarianism- that it is difficult to tell on reading her whether she is talking about the same species of Homo sapiens that I interact with daily. 

I want to chart my objections to Rand on two levels: a slightly more esoteric look at why I think Rand's ideas are morally bankrupt and a pragmatic look at why Rand should never, ever be used as a basis for policy making.

'To say "I love you" one must first be able to say the "I."'- The Sterile Self Interest of Rand's Philosophy

In the Groundwork, Immanuel Kant conceived of humans as the ends in themselves- that is we should treat other people (and ourselves) as ends, rather than means to an end. Now Kant's philosophy obviously has problems- what about in purely economic transactions? Why is it silent about animals? But it brings up the important point that to be moral in any sense, we can't just aim for ourselves and ourselves alone. Yet Rand would have the individual only ever act for themselves- when it is clear that human society is based on cooperation and reciprocity. It is worth presenting a more detailed rebuttal of this kind of individualism before I get to why I find it to be morally reprehensible rather than just incorrect.

Rand argues that by choosing to think, humans can liberate themselves from the tyranny of being yoked to others, a logical consequence of a person's primary obligation which she thinks is one's own wellbeing. She believes that humans have a choice to think, and rational thought will necessarily lead them to Rand's philosophy. Setting aside this supreme arrogance, one of the examples she cites is that "He cannot obtain his food without knowledge of food and of the way to obtain it. He cannot dig a ditch––or build a cyclotron––without a knowledge of his aim and the means to achieve it. To remain alive, he must think" (Atlas Shrugged). Now this is odd- because her examples are all examples of what we need other people for - gaining knowledge and tools to survive in the world. All human societies, but especially the capitalist societies Ayn praises are rooted in trust and cooperation- because the market isn't a natural state- it relies on trust for its very survival. Indeed contra Margaret Thatcher, there is such a thing as society- it is based in the cooperative social relations of semi-autonomous semi-rational individuals with overlapping state, market and social institutions. Humans cannot reason just for themselves- both because we have evolved to be happier when other people are (so called other-regarding preferences) and because as I will later elaborate on, to do so would be a disaster.

But why is this immoral, rather than just factually inaccurate? I will borrow another of Kant's ideas as an 'intuition pump' (i.e. my argument will not rely on it, but it helps to illustrate a point), that of the 'categorical imperative' or basically that any moral law should be universal, without regard to circumstance. Now, if everyone applied Rand's morality or i.e. if Rand's thoughts were taken to be universal- the consequences would be monstrous! We have enough problems in our society as it is with self-regarding people (think of the consequences of crime or unrestrained uses of power). We would have no regard for the vulnerable, or disadvantaged- no social progression, only the inevitable march towards violent anarchy. This is important because Rand wants her principle to be universal, rather than say historically contingent on post-industrial capitalism. Even if it was contingent, this presents even larger problems for her philosophy, it is empirically true of modern society even more than every previous society that it can only function by cooperation- meaning the application of any of Rand's principles would not lead to more freedom, but rather societal collapse. 

Further, if morality is 'having a good will' or doing what is 'right', the ability to fully determine that for ourselves despite the consequences for others- seems both contradictory and downright criminal (why can we just disregard all others?- Rand is not particularly clear on this point). Now, I would not claim that everyone should follow Comte's maxim that we should all live for others, but any practical morality must include both other- and self-regarding components, otherwise in my view we may as well give up on humanity. 

But the lack of moral value aside, what briefly are the pragmatic outcomes of Rand?

"Wealth is the product of man's capacity to think"- The Practical Consequences of Randian Thinking

I want to briefly illustrate now three ways Objectivism is a real-life disaster: what would happen if some people took on Rand's worldview, what would happen if everyone did and some actual examples of Objectivists as policy-makers.

In Anthem, Rand acknowledges that the earlier is more likely as "The truth is not for all men, but only for those who seek it" (Rand also acknowledges that in various places not all people will 'think' enough to embrace her ideas). This would likely lead to Objectivists trying to manipulate others as to increase their own happiness- as without proper regard for others or society at large, many of our innate moral precepts cease to have real meaning. On a policy level, Objectivists would agitate for the abolition of 'coercive' government structures- such important social mechanisms as any kind of welfare, public goods: indeed most things that governments do. While it is their right to do so- these policies would lead to the kind of outcomes detailed in the next paragraph.

If for some horrible reason we all became Objectivists, something similar to what I discussed earlier would happen- the state would retreat into such minimalism that it could not function (Rand wants the slow abolition of all taxes) and society itself would never be able to fill the gap that the state previously had. Especially when all members of society now treat themselves as the only end to any means. But what has this looked like before?

Two prominent disciples of Rand are Paul Ryan (although he's released contradictory statements to try and hide this) and Alan Greenspan. Ryan's budget, drawing on Rand's principle of pulling back any coercion of individuals, would fundamentally wreck the balance of income distribution in the United States and would ruin the already struggling United States healthcare system. Greenspan, the former US Federal Reserve chief cited Rand as one of his primary influences in his stewardship of the US economy towards the oblivion of 2007 by pursuing ruthlessly pro-business and anti-regulation policies.

Conclusion- Where to from here?

I should note at this point that I don't find Objectivists themselves immoral- many of them are quite lovely people, partly because I've never actually met anyone who acted as Rand would have them do in real life (even if it affects their political views). But I do think that Rand's thinking is a dangerous virus that can infect the impressionable and ruin political debate with its dogmatic insistence on the primacy of individual self-interest. We should all inoculate ourselves against such thinking.

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Dan Gibbons is a third year Bachelor of Commerce (Economics) student at the University of Melbourne. He has a forthcoming publication in Intergraph: A Journal of Dialogic Anthropology (about memory and nationalism) and is currently submitting papers on the rise of modern consumerism, the role of criminology theory in literary criticism and the institutional theory of nationalism. Dan is a keen debater and public speaker.

Almost Human: On Great Apes, Selfhood and Rights

The Great Apes are always seen as humanlike- probably why films like The Planet of the Apes resonate so much- after all could we really relate to a 'Planet of the Elephants' even if we know elephants are intelligent? And when we see apes in pain or being mistreated this tends to again tear at our heart strings more than most animals, save in Western cultures perhaps dogs or cats. While we aren't directly descended from chimpanzees (contra Darwin's initial musings on human evolution), we are very closely related- so this does indeed make sense. But is there a scientific basis to this feeling that we aren't too different from apes?

In particular, after a recent Australs debate (to the effect of that this house would grant the great apes more rights than other animals), I was prompted to think about some of the scientific underpinnings of that debate- do apes have selfhood? Should we grant rights on this basis? Do apes have unique cognitive capabilities? This very complex series of questions is far too much for a blog post of this length to entirely deal with- so for those particularly interested I recommend The Age of Empathy by Frans de Waal, or indeed any of de Waal's masterful works. I will briefly outline two claims: apes have many humanlike capacities and do have selfhood (or something very closely equivalent) and that attendant to this we should grant animal rights on a spectrum (because they should exist for purposes that aren't just for human benefit).

"Beware the beast Man, for he is the Devil's pawn": What separates apes from man?

A good summary answer would be: effectively, a lot of apes' capacities are simply gradations of fully mentally able human capacities. 

Let's start with recognising others: that capability is a lot more basic- it exists in a lot more species than can recognise themselves- for instance social insects are aware of what the other members of the colony are feeling but hardly care much for their own being. The most basic capacity of any social creature is emotional contagion- that is, the ability to perceive others' emotions and feel them yourself. This is what newborn babies in hospitals can do- cry when others cry, even if they don't know why they do this. The next stage is consolation- this is what the higher primate species (as well as dolphins, some lower primates and a few other species) can do- have direct concern for others. An example is that male chimpanzees are often comforted by direct relatives and friends after losing a fight. The final kind is targeted helping- so for example, if you hear a scream and know that you should go and rush to deal with the danger itself. This exists somewhat in non-hominid higher primates, but humans do have a more finely attuned capacity to this (though this has negative effects to- it enhances our capacity to torture as well). Humans do indeed also have a more evolved capacity for imitation- giving rise to stronger memes or 'units of cultural transmission' (analogous though not the same as genes). 

More controversial though, is the question of whether we can find selfhood in non-human animals. This is a very philosophical question (with increasing argumentation from psychologists like Susan Blackmore that the idea of a truly independent self doesn't exist at all- see her book The Meme Machine), so I will largely leave treatment just to self-recognition. One standard test of self-recognition is to put a dab (that is visible but impossible to feel) on an animal's forehead (or equivalent) and see if they try to rub it off when they see themselves in a mirror. Now, in a very young human child (say less than 2) if you try this- they can't yet recognise themselves and so they don't try and rub the dab off. But in an older child or chimpanzee they will indeed try and rub the mark off- showing that they recognise that it is indeed themselves in the mirror (this circumvents the problem of having to ask children or chimps). 

The fact that these capacities exist in non-humans isn't troubling at all- if it didn't, the traits would be evolutionarily new and thus not particularly 'deep' in our neural architecture. As de Waal notes in The Age of Empathy, if we were the only species to recognise ourselves and feel empathy- these would be particularly weak traits of ours- and this is certainly not the case.

So, humans are only separated from apes by gradations of these capacities- not the cosmic leaps that were once supposed in the philosophy of mind (and what a relief- such philosophies are so supremely arrogant about humans that they were often allied with attempts to put our little rock of a planet in the centre of the universe).

How Should We Grant Rights Then?

I would find granting rights merely on capabilities deeply problematic- I am not a professional philosopher, but it would seem to me that there is little distinction between the capabilities of the mentally impaired or young children and particular animal species, yet I would prefer the state to give more rights to the humans (and certainly never withdraw rights wherever they can be given on the basis of incapacity alone). But a capability consideration in how we view rights seems to make intuitive sense- fish after all feel pain in a less brutal way than a chimpanzee does, and I would feel much less guilty about the pain of a fish.

I would therefore propose that animal rights exist on a spectrum (which is already partly recognised in law, but I think should be changed to reflect human purposes less). Obviously there are other reasons to give animal rights- torturing animals reflects badly on humans and also society wants to minimise the amount of pain in the world. But to the extent that rights to animals are 'inherent' (which I would argue they partly are), I would say they need to be reframed in the context of the capacities of that animal. And possibly not even how 'human' they are- but merely in the contexts of empathy and selfhood (for example if animals had other ways of expressing either of those ideas, it would still make sense to grant them rights).

In particular, such rights might included being treated differently in experimental trials or having particular guarantees on the kinds of environments in which Great Apes are kept.

Conclusion

Any ethical conversation, particularly about animals, is always very divisive. But this post has attempted to explain a few of the surface scientific and philosophical issues about the Great Apes and their rights. In particular, it has claimed that they have a kind of selfhood, and so should be afforded more rights on a spectrum. After all, if Great Apes are so like us- it should be unbearable to see them suffer.

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Dan Gibbons is a third year Bachelor of Commerce (Economics) student at the University of Melbourne. He has a forthcoming publication in Intergraph: A Journal of Dialogic Anthropology (about memory and nationalism) and is currently submitting papers on the rise of modern consumerism, the role of criminology theory in literary criticism and the institutional theory of nationalism. Dan is a keen debater and public speaker.

''Sing if you're glad to be gay. Sing if you're happy that way": Modern Sexual Identity and an Interrogation of the 'It's biological!' argument

N.B. This article primarily concerns sexuality, so in most cases I mean ‘gay’ in the sense of alternate sexuality (e.g. LGBQQ etc). While the I and T in LGBTIQQ are very important, they fundamentally rest on different issues.

In 1976 when Tom Robinson sang 'Glad to be Gay', it was an intentionally provocative song about police brutality, anti-gay violence and the need for solidarity amongst gay men against broader social oppression. The gay community at the time was largely focused (as they had to be) on the legalisation of sodomy and stopping particular forms of anti-gay violence. As such, one of the arguments put forward for gay rights at the time was that being gay is/was 'found in nature' or 'genetic', a sort of born-with predisposition to homosexuality (or bisexuality etc.). This argument is trotted out time and again, generally not by activists formally but often enough in informal conversation that I decided to write out my strong objections to it.

I for one think this argument was at best useful for a particular purpose at a particular time and at worst is actively harmful to the cause. I am 'Glad to be Gay' for precisely the reason Tom Robinson puts forward implicitly- no matter what anyone else thinks, it is an important part of who I am, not some genetic disease. I want to discuss two controversies that to me demonstrate the absurdity of what I will call the 'biological determinism argument' (for sexuality and associated rights): the search for the 'gay gene' and an absurd controversy over penguins.

Personally, I'd like homosexual (also bisexual, pansexual etc) love and people of all sexualities broadly to be respected not because of any biological reason but because it is the decent human thing to do. I would like to note that it is almost definitely true that sexuality has a biological component (although along a spectrum and with role for social influences). I just don't think this is a good or relevant argument to the continued debate over social and legal rights.

'Sing if you're glad to be gay': The Curious Case of the Search for the Gay Gene

I should first note, scientists can search for what they like, I am not suggesting that any research into the genetic determinants of sexuality should be stopped (actually such papers are very interesting). What concerns me is the obsession in some quarters with stating that there is a ‘genetic predisposition to homosexuality’- yes, this is true but an unhelpful political argument.

The first reason for this is such research is easily used by opponents of gay rights against gay people- for instance when a National Organisation of Marriage (an American group opposed to gay marriage) board member said that “our scientific efforts in regard to homosexuality should be to identify genetic and uterine causes... so that the incidence of this dysfunction can be minimized”. This is particularly a problem when gay rights activists use language that predicates the idea of tolerance on acceptance of this biological argument. Now, this is not to argue that sexuality is so fluid that through some sort of conversion therapy that people would be able to change it. There is significant evidence that sexuality is partly genetically determined and that to an extent it is largely unchanged over a person’s adult life. Regardless, we should allow people to sexually identify how they like- whether that be gay or queer or pansexual or bisexual – because the meaning of the Sexual Revolution broadly was meant to be more freedom not consignment to a Foucault-style cage.

Secondly, this argument isn’t very persuasive prima facie and can even lead to divisions within the queer community. Saying that something is biological destiny isn’t a particularly good argument for legalising the behaviours, relationship and family structures etc. that are associated with that biological predisposition. Take for example, most of the paraphilias (the ‘atypical and extreme’ sexualities e.g. non-human objects or children) – there is some (though conflicting) evidence that such sexuality has a biological component and we should never, ever legalise the behaviour associated with such mindsets. This is particularly true because adults can rationally consent to homosexual acts. To do so would be to commit the naturalistic fallacy- that is to confuse what is biologically with what ought to be morally.

In a similar vein, the reason that homosexuality and bisexuality are socially valid and should be allowed legally is that there is no harm to anyone involved. Even if it were true that people chose to be gay (which I am not suggesting is true), it should still be true that we allowed people to sleep with their own gender and form relationships with their own gender if they wished because that love/those sexual acts are fundamentally not harmful and those acts/relationships bring utility to people. Further, the line of argument has even been turned at times on bisexual people to claim that they ‘just aren’t gay yet’ or are ‘self-hating’, which is to confuse sexuality (and romantic feelings) with an awful, narrow binary between heterosexuality and homosexuality.

But how did penguins become involved, you ask?

‘And Tango Makes Three’: How Two “Gay” Penguins became an Absurd Political Issue

Roy and Silo were two male Chinstrap Penguins at the Central Park Zoo, who in 1998 formed an all-male couple and were eventually given an egg to hatch together by zookeepers after they attempted to hatch a rock. Now, like all penguins they are pretty adorable- but they became mired in political controversy for two reasons: 1) there was a farcical debate between the Christian Right and the liberal Left about whether this situation was ‘moral’ and 2) a (very good) children’s book was made about the pair called And Tango Makes Three.

In the first instance, controversy erupted over whether the pair constituted evidence that homosexuality is found in nature. Now, calling penguins gay is queer in the very old sense of the term as odd, while animals may have homosexual sex (although there is no record of Roy & Silo doing this), this doesn’t make them any more gay than an otherwise heterosexual human male who has sex with a man once. Because animals don’t define themselves they by definition cannot be ‘gay’, merely they might form pairings of the same gender or have sexual relations with members of their own gender. It would be truly bizarre if homosexual behaviour had evolved in penguins and humans for the same reasons- it would more likely be a case of convergent evolution, where the same trait is acquired by different lineages (for example bats and pterosaurs both evolved wings for flying).

But this was nothing compared to the reactions when the couple split up and Silo found a female partner called Scrappy. Focus on the Family declared “for those who have pointed to Roy and Silo as models for us all, these developments must be disappointing. Some gay activists might actually be angry”. Luckily, the National Gay and Lesbian Taskforce responded that the “actions of two penguins is not a good way of answering the question of whether sexual orientation is a choice or a birthright”—but to me this demonstrates the danger of this argument.

And then in 2005, Peter Parnell and Justin Richardson authored And Tango Makes Three, a children’s book based on the two birds (their chick was named Tango), which was intended to explain same-sex parenting to kids. The point here wasn’t that sexuality was found in nature, as both some pro- and anti-gay groups supposed, it was just a fun way to explain same-sex parenting to kids!

So, as this particular controversy demonstrates any nature-based arguments surrounding homosexuality are quite silly.

Conclusion

I believe that arguments for gay rights should solely focus on the necessity and utility of freedom for LGBTIQQ people rather than commit a naturalistic fallacy of discussing whether being queer is ‘natural’. Because I’m glad to be gay, whether I was genetically made this way or not. 

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Dan Gibbons is a third year Bachelor of Commerce (Economics) student at the University of Melbourne. He has a forthcoming publication in Intergraph: A Journal of Dialogic Anthropology (about memory and nationalism) and is currently submitting papers on the rise of modern consumerism, the role of criminology theory in literary criticism and the institutional theory of nationalism. Dan is a keen debater and public speaker.

China's 'Bread and Butter Question' and the New Scramble for Africa

This is an edited text of a paper submitted to 'Contribute' Magazine, the publication of UQ's United Nations Student Association

In January this year, an interesting guest attended the opening ceremony of the new African Union headquarters building in Addis Ababa, Ethiopia: Jia Qinglin, the fourth ranking member of the Politburo Standing Committee of the Communist Party of China. Amazingly, the entire US$200 million construction project (everything from raw materials to interior furnishings) was bankrolled by the Chinese government. This is a profound exemplification of the Sino-African union in the changing economic and political landscape of the twenty first century.

The isolationist foreign policy of the Middle Kingdom is no more. Indeed, since the economic reforms and Open Door Policy of Deng Xiaoping (1978), China has been at the forefront of the global economy and international trade. Since 1999, the ‘Go out Policy’ has become the primary framework defining China’s investment in, and exploitation of, expanding regional and international markets. As the example of the Chinese donation of the new African Union headquarters suggests, Africa has been the major focus of China in recent years. China needs the continent’s natural resources to augment its (already) unprecedented industrial growth. Channelled through its state-owned enterprises (and defined by a large migratory flows of Chinese nationals), Chinese capital has often crowded out any local or regional economic actors. Although the ‘Go out Policy’ has been at the fore of Chinese economic activities in Africa, the so-called peaceful rise (marked by soft power, non-interference and responsible world leadership) also characterises the Sino-African relationship. At the opening ceremony of the new African Union headquarters, China reaffirmed this commitment: Jia Qinglin remarked, “China will firmly support African countries in their efforts to uphold sovereignty and independence and to resolve African issues on their own.”

China has reignited the scramble for Africa and is seemingly reigning as the Rhodes Colossus. In recent years, it has been the largest single source of financial aid and foreign investment for Sub-Saharan Africa. Last year, trade amounted to US$120 billion, surpassing the United States and the European Union. This this comes at no coincidence, given China’s newfound status as the world’s largest energy user, according to the International Energy Agency. The resource extraction has been further complimented by a large inflow of Chinese nationals into the continent (with Chinese state owned enterprises now dominating the economic landscape). Sanou Mbaye, a former senior official of the African Development Bank, states, “more Chinese have come to Africa in the past ten years than Europeans in the past 400. First came Chinese from state-owned corporations, but more and more arrive solo or stay behind after finishing contract work.” The new Chinese entrepreneurial movement has excelled with government support. Notwithstanding the continental disincentives of civil wars, institutional corruption, political instability and (recently) the GFC, China has been capitalising on the lack of Western competition. Indeed, negotiations with African governments (particularly those with records of human rights abuse) have proven remarkably straight-forward for Chinese investors. Chinese investment is afforded protective security by African governments through legitimate reciprocal trade agreements, but also through corruption. Suffice to say, these cacophonous relations show no signs of quietening down. On the diplomatic front, China has more embassies and diplomatic postings in Africa than the United States and European Union combined. In 2000, the Forum on China–Africa Cooperation (FOCAC) was established and its 2006 ministerial meeting was the largest diplomatic forum in both modern Chinese and African history.

In the wake of the United States’ waning influence and Europe’s economic woes, many consider that the Middle Kingdom is heavily engaged in neo-imperialism throughout Africa’s postcolonial states. In 2006, then UK Foreign Secretary, Jack Straw, criticised China as neo-imperialist, remarking, “most of what China has been doing in Africa today is what we did in Africa 150 years ago.” In 2011, US Secretary of State, Hillary Clinton, warned Africa of a “new colonialism”. Although not explicitly naming China, she did urge greater scrutiny of its investments in Africa. Nevertheless, the character of Sino-African relations is markedly different from that of the continent with European and American relationships. Now, it is investing in industry and infrastructure and importing resources and goods; though this largely centres upon the extraction of largely finite resources, China has also invested in telecommunications, financial services, and energy infrastructure. Sino-African relations are officially guided by the policy of ‘mutual benefits’ and bilateral economic cooperation. Drawing upon this policy’s profoundly positive developments, Ethiopian Prime Minister Meles Zenawi recently stated, “The future prospects of the [Sino-African] partnership have never been brighter. China’s amazing re-emergence and its commitments for a win-win partnership with Africa is one of the reasons for the beginning of the African renaissance.”

In exchange for these developments, China has received large contracts from African governments and priority with respect to to the extraction of natural resources. In 2007, China signed a US$9 billion dollar mining agreement with the Democratic Republic of the Congo, constituting 68 per cent of the latter’s annual mining revenue. In return, the Congo received hospitals, schools and 6000 kilometres of railway and road infrastructure all financed by China. Without Chinese textile corporations, unemployment in the South African town of Newcastle would be over 80%. Workers are paid approximately US$200 per month, which is greater than in China, but still less than South Africa’s minimum wage. The local unions have tried to shut these textile factories down, but a majority of the workers consider a poorly paid job to be better than none at all. 

Whilst many Africans perceive the West’s demeanour as condescending, the Chinese ostensibly manage their relationship with Africa as a serious business partnership. As Faida Mitifu, the Democratic Republic of the Congo’s Ambassador to the United Nations said, “There are people who still consider Africans like children who can be easily manipulated. The good thing about the [Sino-African] partnership is that it’s sincere and give and take.” On the surface it does – in fact – seem that China is improving Africa’s wellbeing through its trade, investments and financial aid.

Whilst the official policy guiding Sino-African relations is of ‘mutual benefits,’ the primary rationale for Chinese involvement is out of economic necessity and hunger for resources. Consequently, whilst official government statements report on the positive friendship, there are widespread claims of human rights abuses, poor working conditions and environmental degradation leading to a wave of anti-Chinese sentiment and xenophobia on the continent. As evidenced by oil spills in Sudan and Gabon, weekly deaths in Zambia’s Chinese-controlled mines, slapdash construction in Guinea and endemic corruption in some African governments, China has inflicted substantial harm across the continent.

Amongst other continental statesmen, the Environment Minister of Zimbabwe has been an active critic of the Chinese, calling them “makorokoza”, a scornful local term for criminals. Thus, to avoid condemnation from African governments, the Chinese have engaged in bribery and coercion. Chinese managers have bribed government ministers and even taken some on ‘study tours’ to massage parlours in China. Obstructionist African midlevel officials are sacked and workers who assemble in groups are dispersed with rubber bullets. In the rare event that cases do end up in local courts, there have been reports that witnesses are intimidated and judges being paid off.

China has become just as embedded in the African continent as the minerals and oil that its state-owned companies are extracting. Whether through massive migration of Chinese nationals or the perpetual presence of state owned enterprises, China is seemingly, at least to some Western officials (such as Clinton and Straw) and local African populations, colonising the African continent. But this begs the proverbial question: is this really neo-imperialism and, akin to the Scramble for Africa of the late 19^th and early 20^th centuries? On balance, the answer is ‘no’; there is a lack of cogency between the plethora of Chinese corporations and the heterogeneity of Chinese private entrepreneurs. China is simply being a rational economic powerhouse and seizing the opportunity to exploit the resources and markets in Africa to fuel its own economy.

This points to an even more important question – is a Chinese monopoly on Africa’s natural, economic and political capital good for the world economy? Obviously a monopoly in any market is detrimental, but is China alone to blame for crowding out other regional and international actors? Arguably Western nations are equally if not more to blame – Europeans and Americans exploited the natural resources of the continent through imperialism and are responsible for the some of the most intense ethnic violence in history. Many Africans have felt that the West has abandoned their plight. Indeed since the 1980s, with increased civil wars and ethnic violence, and with the global financial crisis since 2008, there has been an apparent lack of political and corporate willingness in the West to invest in infrastructure and industry on the Africa continent.

Although China’s monopoly on African markets and industries may be regarded as a form of economic imperialism, it fundamentally differs from the character of historical European colonialism in Africa. The driving forces of European colonialism were administrative, political and cultural. European nations attempted to maintain cultural hegemony over African colonies, importing customs from food to sports and entrenching political and legal institutions. The British implanted the common law system and cricket in Kenya; the French implanted language and pastries in the Ivory Coast. Not bound by such administrative or cultural hegemony, the underlying motivations for Sino-African relations are marked by a deep paranoia over energy security by the Chinese government.

China has decidedly operated like a private corporation in a Western nation – prioritising profit and only caring about social responsibility and public administration when it serves a purpose. It has rationally sought to exploit African resources for its factories that are fuelling the global economy and making the cheap products that we in the West consume. Surging foreign direct investment from China has substantially affected Africa’s economic prospects and continental infrastructure networks. Indeed, according to Johnnie Carson, the United States Assistant Secretary of State for African Affairs, “China is a very aggressive and pernicious economic competitor with no morals. China is not in Africa for altruistic reasons. China is in Africa for China primarily.” During the nineteenth century, the British Empire was widely regarded as a mercantile powerhouse ‘upon which the sun would never set’. Today, it is perhaps more appropriate to reason that ‘the sun never sets on Chinese investment’. Notwithstanding speculation as to the future character of its political hegemony in Africa, Beijing’s insatiable appetite for natural resources will define the growing presence of Chinese investment throughout the African continent.

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Tasman Bain is a second year Bachelor of Arts (Anthropology) and Bachelor of Social Science (International Development) Student at the University of Queensland. He is interested evolutionary anthropology, public economics and philosophy of science and enjoys endurance running, reading Douglas Adams, and playing the glockenspiel.

Review: 'What Money Can't Buy: The Moral Limits of Markets’ by Michael Sandel

Professor Michael Sandel is quite the philosophical superstar; his course on Justice at Harvard University – now available online and for free – has been viewed by millions. Compared with your average, sleep-inducing university lecture, Sandel’s course makes for compelling viewing. In 2009 he delivered the BBC’s Reith Lectures on ‘A New Citizenship’ to great acclaim. He is, without question, a brilliant communicator and a stirring intellectual.

In his latest book, ‘What Money Can’t Buy: The Moral Limits of Markets’, Sandel takes a prod to our fetish for markets and the rising tide of commodification. Some things should just never be sold, he argues, because doing so degrades and corrupts goods that are best understood in non-market terms.

It’s necessary to get something out of the way to begin with, because I can hear the indignant cries of the rampant right-wingers already: “Communist! Communist!” This is not a tract against capitalism. Sandel doesn’t question – and really, the debate is just boring now – that markets are powerful and efficient (though, imperfect) tools for the allocation of resources and the organization of productive activity. Free markets are, as Churchill said of democracy, the worst system available – besides everything else. What this book laments, is “the expansion of markets, and of market values, into spheres of life where they don’t belong,” and the fact that, “without quite realizing it, without ever deciding to do so, we drifted from having a market economy to being a market society.”

There are two arrows to Sandel’s bow; the first is an objection about inequality, and the other is about corruption. To take them in turn: in a society where everything is for sale, life is harder for those of modest means – the more money can buy, the more it matters. Secondly, some things are improperly valued or degraded (corrupted) when commodified. I don’t agree with Sandel’s approach to why some things shouldn’t be sold, but let’s give him the benefit of the doubt for now and consider some examples. Here are some things you can now buy (at least in the United States):

-  A prison cell upgrade: $82 per night. In Santa Ana, California, and some other cities, nonviolent offenders can pay for nicer accommodation – a clean, quiet jail cell, away from the cells for non-paying prisoners.

-  The services of an Indian surrogate mother to carry a pregnancy: $6,250. Western couples seeking surrogates increasingly outsource the job to India, where the practice is legal and the price is less than one-third the going rate in the United States.

-  The right to shoot an endangered black rhino: $150,000. South Africa has begun letting ranchers sell hunters the right to kill a limited number of rhinos, to give the ranchers an incentive to raise and protect the endangered species.

Of course, some of these things are a little pricey. But no worries – you can always raise some extra funds by:

-  Renting out space on your forehead to display commercial advertising: $777. Air New Zealand hired   thirty people to shave their heads and wear temporary tattoos “Need a change? Head down to New Zealand.”

-  Stand in line overnight on Capitol Hill to hold a place for a lobbyist who wants to attend a congressional hearing: $15-20 per hour. The lobbyists pay line-standing companies, who hire homeless people and others to queue up.

-  If you are a second grader in an underachieving Dallas school, read a book: $2. To encourage reading, the schools pay kids for each book they read.

Sandel’s book is great value for its panoply of jaw-dropping and often hilarious examples alone. The ones I’ve outlined here are by no means the most unusual (for the truly tragic, wacky and outrageous, you’ll have to get yourself a copy of the book).

Take the phenomenon of hired line-standers. What should we make of this practice? My guess is that most people would think that paid line standing, at least on Capitol Hill, is objectionable. But why? One reason is that Congress is a democratic institution, and when well-heeled lobbyists buy their way into hearings, it undermines the public nature of the forum. If allowing this practice would make congressional hearings the exclusive purview of the rich, I think we’d have a pretty good reason not to allow it.

In his book the ‘The Gift Relationship’, the British sociologist Richard Titmuss showed that paying people decreased both the quantity and quality of blood that a blood bank would receive (unless a very large amount of money was at play). The payment converted what had been a donation into a transaction, and eroded the moral aura that had been associated with the act. A market culture, just as here, changes how we view a whole multitude of goods, and not always for the better.

Sandel walks a fine line in this book between playing the moralist, and the conversation starting provocateur. It’s difficult to know which examples he supports and which he doesn’t. Let’s take another one from above: paying $150,000 to kill an endangered black rhino. No doubt there is an emotional knee-jerk, or ‘yuck’ reaction against this. It seems base, or uncouth, to kill such a beautiful creature if the only reason is that it’s for what might, generously, be described as ‘sport’. But it’s not clear why we shouldn’t allow it if it does in fact lead to less black rhinos dying overall. The empirical evidence Sandel discusses indicates that it has indeed had this effect; the new monetary incentive to preserve rhinos has been, apparently, enormously effective. If what we care about is outcomes, we should (assuming there are no viable alternatives) allow the hunters their bloody indulgence.

I’m not convinced by Sandel that we need to philosophize to figure out the ‘nature’ of goods. We can, and should, be less highfalutin and more consequential in our analysis. A decision not to allow something to be sold is best reached after concluding that doing so will have bad consequences, not because it is somehow inconsistent with it’s ‘nature’. Sandel is right to challenge the market fundamentalists, but I am concerned that he seeks to replace it with a fundamentalism of his own; namely that some things should just never be sold, no matter what.

It is in enunciating the various ways in which market culture has degraded and debased society (most particularly in the United States), and in its vigorous call for a more robust public debate, that the value of this book chiefly lies. Sandel is never less than highly entertaining, and even if you don’t agree with him, this book won’t fail to induce some seriously enjoyable cogitation.

Here is an interesting interview of Sandel on this book. And for those who haven’t heard of his course at Harvard on Justice, it is well worth taking a look.

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William Isdale is a law and arts (politics and philosophy) student at the University of Queensland, where he is an Academic Excellence Scholar and TJ Ryan Medallist and Scholar. He is the President of the Australian Legal Philosophy Students' Association and Editor of the Justice and the Law Society's journal 'Pandora's Box'. In early 2012 he was a visiting student at Oxford University's Uehiro Centre for Practical Ethics.

The 'Sole director of the fate of human beings'?: Revisiting the idea of markets as 'default'

Markets are often described by economists in an almost messianic way- as if they alone will solve all of the world's problems. Now, it is worth noting that markets do a great many things well- they can be great democratisers (in the sense that they in principle allow for a levelling of the playing field), they are often better at distributing resources than a centralised economic instruments and they are more free of rent-seeking and political influence than command economies. However, something they certainly are not is natural- they are like anything else institutions, Douglass North's 'rules of the game' or 'humanly devised constraints on action'.

Indeed, as Polanyi claimed what has really happened is a Market Society (for anyone interested in a more in-depth look at this idea I recommend Polanyi's The Great Transformation) has been created: a combination of market exchanges, industrial production and hedonistic consumption. In this blog post, I will briefly chart how this is different from the mainstream economic account of what market mechanisms are, before briefly posing some conclusions on how this might affect modern development policy (looking particularly at the experience of Russia in the early 90s). The key difference I posit is that along Polanyi's lines, markets are embedded in the social and cultural relations of a society, rather than existing as a separate mechanism alongside them as neoclassical economics assumes (actually neoclassical economists mostly just seem very disquieted whenever the word 'culture' is mentioned).

'The Invisible Hand': Modern Market Exchanges

Markets used to be largely places where often subsistence-based farmers, tradespeople or originally small-scale settlers or tribes would get items they needed but didn't have or couldn't produce from other people. They were often ad hoc, sometimes based on barter and very much not interconnected- prohibitions both religious and social against profit-making ('usury') were followed to various degrees. Modern capitalism changed all this. Modern market exchange is predicated on the idea that commodities have value because of the relationship between things, especially in terms of the translation into a monetary value. Trade is predicated on the substitutability of unlike goods and each participant having a different scale of values in order to produce mutually beneficial trades. Markets have to be embedded and naturalised within society, that is markets must have “institutedness”. As Polanyi observes, ‘free markets’ are instituted processes that must be articulated through social, legal and political strategies. 

This system of exchange is predicated on social acceptance, which is why Western development projects often include help setting up market economies, as a ‘charitable’ venture. Therefore, when confidence is lost in markets they cease to function and as a test of this hypothesis, the exchange system should also fail. This occurred amongst the Nentsy people of Northern Siberia when the bank accounts the Soviets had given them became valueless due to the depreciation in the value of the ruble in the early 1990s. As predicted, the herders switched from buying consumer goods off the Russians back to solely reindeer herding. 

Markets did not become successful because barter inherently transformed into modern capitalism- indeed as Polanyi notes, the really curious thing about laissez-faire capitalism is how planned it was- it needed helping although through establishing private property rights, creating and then dismantling large monopolies (like the East India Trading Company) and a change in attitudes to wealth accumulation, which brings us to consumption. 

'J'adore, Dior': Consumption Patterns and the Modern Corporation

Value in cultural terms is defined by how people expect the world and people in it to behave and how they judge that behaviour. The value of wealth accumulation has changed from the medieval view of public virtue arising from private virtue to the formal economists’ idea that public virtue can arise from private vice. Associated with this has been a popularisation of modern hedonism, characterized by the creation of cultural value in the self-conscious seeking of personal pleasure. These concepts have spread widely to the point where self-interest is taken for granted in most of modern Western society and through global media, much of the world. Consumer goods are in Western society associated with 'commodity aesthetics' in which people ascribe value solely on the basis of design or promotion. Companies have sought to create a 'hyperreality' (Baudrillard) or an aesthetic coating of the world that seeks to use images to generate a market-based society. Companies have also successfully in many cases proselytised to the developing world, for example a Power Rice Ad that was run in Papua New Guinea that was synchronised to the soundtrack recording of “Power to the People!” and featured a muscular man lifting the rice at a construction site. Foster also charts the rise of beauty contests and other competitions that serve to reinforce that cultural capital is to be gained through individual choices (see Materialising the Nation: Commodities, Consumption and Media in Papua New Guinea by Robert Foster). This is also related to what Jonathan Friedman calls homo consumens, "whose fragmented identity is constantly rearranged by the winds of fashion". But how is this all made?

'Work must not Cease’: Mass-Production'

Production is driven by the demands of the market, with an emphasis on creating surplus to trade with others and where the value is determined by what others will exchange for them. Perhaps the defining feature of the capitalist mode is its tendency to reproduce itself on an increasing scale. Production is also changed from previous reciprocal or household modes of production, because who makes the product is now irrelevant- i.e. all goods can at least hypothetically have their value translated into a monetary one (this is quite different to say the Kubo system where who gave you the pig is more important than the pig's 'worth' to you). Capitalism also means that production is no longer autonomous- capitalist production is the most interlinked of any economic system. Finally, high fidelity is ensured by industrialised production technologies, which can produce millions of copies of the same good (this is a key difference from say craft-based economies).

Moving from the Positive to the Normative: Some Policy Ideas

All of the claims I have made so far are what economists call 'positive', that is I've tried as hard as possible to make factual claims about what is not what should be (by hedonism for example, I do not mean a Catholicesque value judgment, I just mean the pursuit of individual pleasure). Now I will try and draw some tentative policy conclusions from what I've written.

The first is that we should not expect markets in the third world to just spontaneously exist- governance needs to get better before the 3rd world can open up to trade more fully and before those countries can actually prosper. In particular, Chicago School style 'shock therapy' is an appalling idea because weak economies with markets that are barely embedded in society will just collapse- witness Russia in the early 1990s. There is a role in international NGOs and other aid providers to tie further aid to institutional improvements- also Western governments should help here rather than just prescribing more of the 'Washington Consensus'.

The second is that the continued survival of markets means that institutions in every country have to be kept strong- there is a role for government policy in other words to stop the collapse in social relations that Polanyi discusses (though I obviously disagree with Polanyi's solution, which is to transition to either socialism or economic democracy).

The last is that while international finance and other forms of globalisation are breaking down national boundaries, there will be a continued role for nation states in the future to regulate these issues and that they will require a truly international response.

I would also make the empirical observation that economics needs to study these issues more- it should not be left to sociologists and anthropologists to fix up huge gaps in modern economic theory.

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Dan Gibbons is a third year Bachelor of Commerce (Economics) student at the University of Melbourne. He has a forthcoming publication in Intergraph: A Journal of Dialogic Anthropology (about memory and nationalism) and is currently submitting papers on the rise of modern consumerism, the role of criminology theory in literary criticism and the institutional theory of nationalism. Dan is a keen debater and public speaker.